A closeout sale represents the final sale for a given item either from a wholesale company or retailer. It could also refer to the last offers from a company in its inventory it provides to the public or another company. Sometimes certain items simply are not selling effectively so they become closeouts. Other times it may be that a retailer is forced to sell off its surplus stock due to a fire, moving to another location, or too much inventory. In many cases, the company has simply gone bankrupt and has to liquidate everything. In these last cases, this type of sale is also referred to as a “going out of business sale.” However, in most cases companies simply have to sell excess inventory as closeouts because they have too much stock.
Major chain-stores and online brands tend to stock their own inventory. This allows them to dispatch it as soon as an order is received from a customer. Therefore, supermarket chains like Walmart and online retailers like Amazon purchase goods (or inventory) in bulk from manufactures and keep it in their warehouses. This often leads to having surplus stock and closeouts that companies must get rid of in order to make more room in the warehouse. Companies that operate their own closeout websites are also faced with situations where they may have slow moving inventory and overstock inventory to get rid of. It is common for wholesale companies to sell excess inventory in an effort to generate cash flow.
Depending on the demand for some of the goods, these retailers choose to sell off the excess inventory that they have to make space for other goods. The space at warehouses has a cost attached to it so these companies prefer to optimize it with inventory thats fast-moving. What happens to the excess inventory then? The companies cannot, of course, return it to the manufacturers. What do they do then?
This is where best wholesale liquidation companies step in. What these companies do is purchase this excess inventory from the large retail chains and closeout websites for a discount. As a result, they’re able to sell off these goods at a discounted rate to their customers. These customers could be small businesses or mom-and-pop stores. Buying from one of the top wholesale liquidators allows them to get these closeouts cheaper than their market price.
When purchasing closeouts from retail liquidation sites and closeout websites, buyers aren’t required to have a resale certificate. As a result, it makes it very cheap and convenient for small businesses and stores to purchase excess inventory from liquidators and that allows them higher profit margins on resale of such surplus stock. Companies may be required to have a sales tax number if they sell excess inventory for resale to other closeout buyers or liquidators.
Sometimes, a large chain store might decide to shut down or relocate. In some cases, they also clear out their older seasonal inventory in order to make space for new products. This happens, for example, after Christmas or Black Friday where stores tend to clear out some of their inventory after seeing the response of customers and tracking what sells best.